Bubbles and Manias

Source: Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University


Fascinating chart showing the psychological of a longer market cycle via Prof Jean-Paul Rodrigue.


Lagging Psychology at Turning Points
Investor Sentiment Wheel
Psy Cycle
Economic Cycles and Investing

Category: Cycles, Psychology

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22 Responses to “Bubble/Mania Cycle”

  1. jabbo says:

    I will put Emerging Markets on the climax top of “New Paradigm!!!”….

  2. [...] Rodrigue, Dept. of Global Studies & Geography, Hofstra University and via Barry Ritholtz at The Big Picture blog, showing the cycle of human emotions which takes place during bull and bear [...]

  3. Al_Czervik says:

    GLD at late-Awareness Phase (bear trap)? We certainly have not seen “Enthusiasm”, “Greed”, “Delusion”, or “New Paradigm” yet. Most of the “Media Attention” has been negative.

    A catalyst is needed and the timing of that cannot be determined.

    • ovchar says:

      What if gold is right above the word “Fear”? Beware of GLD going through 150 (around 1500-1550 on the futures).

    • carchamp1 says:

      Gold is in the “denial” phase.

    • ZenInvestor says:

      We have seen enthusiasm (the new class of gold bugs), greed (bullion and coin dealers hawking their wares everywhere), delusion (the “gold is money” meme), and new paradigm (GLD is in the Awareness Phase).

  4. Jim says:

    This has got me to thinking that there is probably a Google Trend Search that would correlate with this cycle.

  5. JimRino says:

    The “Dispair” slump isn’t deep enough.

  6. Derektheunder says:

    I suppose as far as SPX goes, we could be in the later stages of the Awareness Phase leading up to the first bear trap.

    More likely though, the bear trap sell off was in the latter part of last year, and we’re in the early-ish stages of the Mania Phase. The media attention is there with enthusiasm starting to ramp up. It looks like the slope of the line leading to greed will not be so steep with respect to time.

  7. AHodge says:

    like that bull trap return to normal. US in Mid 08. Europe now

  8. Smokefoot says:

    There has certainly been enthusiasm for gold – the Swiss voting on requiring their central bank to double the gold holdings, a lot of discussion on the gold standard, I saw a mention on a reality show of gold as a long term investment.

  9. Mike in Nola says:

    Did we ever see the “return to normal” phase?

  10. wisegrowth says:

    I posted a graph today that relates to this subject. It compares the economy to an exponential curve. You can see where we had 12 years of bubbles and now we are back to reality… or as the graph above might call it… despair.

  11. Iamthe50percent says:

    “Return to mean” is followed by “take-off” in the next cycle. The graph is Ouroboros. Perhaps this was too obvious to mention, but having lived through three of them, I thought I should mention it.

  12. Porphyry says:

    AND we can look forward to Wallstreet Analysts doing the Limbo Rock again this Earnings season. A full amnesty for sidelined cash to send us supernova in record time!

  13. cschene says:

    I think we are about 40% into the “awareness” phase.

  14. cuprous says:

    What’s sentiment in the face of $80 billion new greenbacks every month?

  15. jaysan says:

    Check out the chart for Bitcoins. E.g.,


    Click on W1 to the left underneath to obtain the long term chart showing exponential rise.

  16. [...] nicked the below chart from Barry, it's hard to say the folks are truly running with the bubbles just now. My best guess is we're [...]

  17. [...] nicked the below chart from Barry, it’s hard to say the folks are [...]

  18. [...] Via Trader Habits, here’s another graphic to add to our massive collection of Sentiment Cycles (here, here and here). [...]

  19. [...] Via Trader Habits, here’s another graphic to add to our massive collection of Sentiment Cycles (here, here and here): [...]